Wednesday, July 21, 2010

Are E85 Vehicles Destined for Extinction?

In 1988, the United States government began allowing carmakers to use E85 flex-fuel vehicles�which run on a blend of 85 percent ethanol and 15 percent gasoline�to help meet Corporate Average Fuel Economy standards. For each mile-per-gallon a flex-fuel equipped vehicle is theoretically capable of getting from ethanol, the government said it would add to the vehicle's total fuel efficiency rating. For example, an E85 light duty truck that averages 13 mpg is currently credited with about a 23 mpg rating.

What the credits essentially do is help automakers cook their fuel economy books by producing hundreds of thousands of flex-fuel vehicles that will likely never even use E85�all the while getting credit for decreasing the amount of gasoline used by their fleet.

When gas prices are low, there is often virtually no economic incentive for drivers to fill their cars and trucks with ethanol. What's more, currently only about 2,500 of the 162,000 gas stations in the United States actually offer E85�and most of those are located in the Midwest. This means that many drivers of flex-fuel vehicles have no chance of using the fuel to significantly cut their petroleum consumption�even if they wanted to.

The End is Near?

The federal government's special affinity for ethanol dates back decades, but it may be coming to an end soon. The E85 CAFE credits are scheduled to end in 2016, and a slew of other ethanol production and blending incentives have either expired or are scheduled to expire at the end of 2010.

Despite this, automakers say they're on track to follow through with their promise to double production on flex-fuel vehicles over 2006 levels. General Motors, Ford and Chrysler say that by the end of the year they will be prepared to collectively produce 1.4 million flex fuel vehicles per year, beginning in 2011. By 2012, American automakers say that half of the vehicles they make will be flex-fuel-capable.